Advisers offered equity in Armstrong-backed fund group

A new multi-asset company, which uses the investment expertise of former Insight pair Patrick and Ana Armstrong, is being launched offering advisers equity stakes.

Distinction Asset Management will have up to 65% of its equity owned by adviser firms, who will participate in the realisation of the firm's value when it eventually floats.

The amount of equity for advisers will be dependent on the volume of assets and length of time they are managed, and DAM is aiming for a flotation on a three to five year time scale.

DAM will launch with £184m under management spread across four multi-asset funds all run by Armstrong Investment Management (AIM), which is the firm created by former Insight multi-managers Patrick Armstrong and Ana Cukic Armstrong.

The four funds are Cautious Real Return, Cautious Distribution, Balanced Growth and Dynamic Growth.

The IM Armstrong Diversified Real Return fund has returned 6.62% since launch on 19 January to 28 May, compared to the average fund which lost 0.1% over the time period.

Current assets being managed by Distinction are run on behalf of 112-year old advisory firm The Fry Group. The firm has a long standing fund management relationship with the Armstrongs and will be the first adviser group to qualify for a stake in DAM.

Stephen Tucker, managing director of The Fry Group, says: "We have committed our clients' assets to fund managers over many, many years and each time we have seen these investment managers walk away with considerable corporate and personal wealth.

"Distinction allows us and other advisers a real opportunity to share in its value. It gives us the building blocks of an asset from which we can move forward and invest in our business and most importantly our clients."

DAM will also have two single asset class funds: an absolute return bond fund managed by John Stopford at Investec and an Equity Income vehicle run by Premier's Ian Rees.

AIM will be responsible for the manager selection in any future investment strategies launched by DAM. It will also establish an adviser focus group to suggest new strategies based on client demand.

The DAM range, which will be available in both the UK and Ireland, will be marketed by Harrington Cooper. Founded by Patrick Cooper, the group currently distributes funds to the discretionary end of the investment market on behalf of groups such as Eclectica and Sustainable Asset Management.

The DAM model is similar to that run by propositions such as wrap provider Nucleus and is seen as a way of helping advisers building longer term value in their business.